Chuck, I commend you’re policy; though I will warn you that you’re likely to have some crazy stories before long if you stick to it. Growing up in Berkeley, CA-one of the homeless capitals of the nation-I regularly faced the same situation you do. My father, however, set the expectations for us about what to do if asked for money. LIke you, he would say he had no cash (usually true) and then offer to buy them what they claimed they needed money for (usually food).
Following this family expectation, I once offered to buy lunch large for a large man pushing a grocery cart and loudly claiming that he was a Iraq war veteran without food. He accepted and during lunch proceeded to show me a gapping wound in his side where he’d been shot during a firefight “in Iraq.” Even his grand story didn’t convince this highschooler that he’d done anything more than get shot in a gang fight in Oakland. In any case, it was certainly one of the more intriguing lunch meals I’ve had.